SHRM Seeks Clarification on EEOC’s Criminal Background Check Guidance


By Roy Maurer December 13, 2012

The U.S. Commission on Civil Rights heard from stakeholders on Dec. 7, 2012, about a U.S. Equal Employment Opportunity Commission (EEOC) guidance regarding employers’ use of criminal background checks in employment decisions.

The commission, which reports to the president and Congress on civil rights enforcement matters, heard from several witnesses on various aspects of the EEOC guidance, published in April 2012. The guidance is an update of prior EEOC policies which does not bar employers from using criminal background checks in hiring, but asks that employers be mindful of discriminatory disparate impact under Title VII of the Civil Rights Act. The guidance calls for conducting individualized assessments for applicants excluded by a criminal background screen to determine whether the application of the policy is job related and consistent with business necessity.

The Society for Human Resource Management (SHRM) gave testimony before the commission.

Jonathan Segal, a partner at Duane Morris LLP in Philadelphia and the Pennsylvania legislative director for SHRM, testified on behalf of the Society that clarification is needed on the EEOC’s interpretation of disparate impact and the agency’s provision that compliance with state and local laws will not shield employers from liability under Title VII.

“Although we appreciate pre-emption, this provision places employers between a rock and a hard place—between losing their state license, or opening themselves up to liability if they don’t comply with a state law mandating criminal background checks and risking a class-action lawsuit if they go forward with criminal background checks and base hiring decisions on the results,” Segal told the commission.

In his written testimony, Segal explained that SHRM had surveyed its members on the use of criminal background checks—87 percent of organizations reported that they conduct criminal background checks on at least some applicants—finding that organizations conduct checks to reduce legal liability for negligent hiring, ensure a safe work environment, reduce risk of theft and comply with state laws.

Segal gave examples of federal and state laws, and sometimes local ordinances that statutorily require employers to conduct specific background checks for certain positions, such as licensed health care professionals, day-care providers, teachers, police and firefighters. Many state laws also require the use of criminal background checks for certain industries to maintain their licenses, including health care and child care.

“We believe state law requirements can fit within the EEOC’s concept of a ‘targeted exclusion’ based on the Green factors and specifically allowed for by the guidance,” Segal testified.

The Green factors reference Green v. Missouri Pacific Railroad, 523 F.2d 1290, 11 FEP Cases 658 (8th Cir. 1975), in which the court said the nature and severity of the criminal conviction, time elapsed since the criminal offense, and nature of the job all are relevant factors in an employer’s defense of a Title VII claim by an applicant denied a job because of a past conviction.

Segal asked that the EEOC clarify the validity of state law requirements as targeted exclusions to the guidance.

In addition, Segal said, the guidance’s interpretation of disparate impact appears to make employers “vulnerable to an EEOC investigation any time they take an adverse employment action against individuals of certain races or national origins based on criminal background checks regardless of whether they have conducted a valid individualized assessment—seemingly making criminal convictions a new protected status.”

He said that it is not clear how imputing disparate impact based on national data can be reconciled with the concept of the individualized assessment, which is tailored to individual cases. “SHRM believes this section should be clarified to help employers comply,” he said.

Segal testified that as a whole, “SHRM members were pleased to see that the guidance did not impose any new bright-line rules explicitly designed to prohibit employer access to and use of certain information” and that “SHRM has not received significant negative feedback from its members about the guidance. HR professionals have long taken seriously the need to balance the rights of job applicants against the needs of the employer when criminal history information is considered.”

Background Checks Not Barred

Carol Miaskoff, the EEOC’s acting associate legal counsel, and other supporters of the guidance repeated at the hearing that “nothing has really changed” with this updated guidance that builds on prior EEOC policy documents issued in 1987 and 1990, and based on factors “already familiar” to employers covered by Title VII. The updated guidance does not prohibit employers’ use of criminal background checks or criminal history information to make hiring decisions, Miaskoff said. “The guidance does, however, outline how employers can use such background checks and the information they yield in a fact-based and targeted way that is consistent with Title VII.”

Commission Chairman Martin Castro put it succintly: “This doesn’t say you can’t do background checks. This tells you how to do them so that you don’t violate Title VII.”

Employer representatives disagreed, warning that the guidance puts employers that conduct criminal background checks in legally precarious positions, neglects safe harbors and puts an undue burden on small-sized employers specifically, which critics argued will have trouble understanding what the EEOC expects of them.

Individualized Assessment Requirements Unclear

“I would argue a great deal has changed,” said Donald Livingston, a management attorney with Akin, Gump, Strauss, Hauer & Feld in Washington, D.C., and former EEOC general counsel. For the first time, the EEOC is requiring employers to conduct an individualized assessment of an applicant with a criminal conviction, he told the commission.

The individualized assessment would consist of notice to the individual that he has been screened out because of a criminal conviction; an opportunity for the individual to demonstrate that the exclusion should not be applied due to his particular circumstances; and consideration by the employer as to whether the additional information provided by the individual warrants an exception to the exclusion and shows that the policy as applied is not job-related and consistent with business necessity.

According to Livingston, confusion arises from the EEOC not making clear to employers when individualized assessments are necessary.

Miaskoff said the guidance does not require individualized assessments but states that such assessments can be an important supplement to the Green factors. Sometimes, she said, an employer’s bright-line rules on barring employment of persons with certain types of convictions “will be OK” under Title VII.

Other witnesses before the commission included the National Small Business Association (NSBA) and the National Retail Federation (NRF), both of which urged the EEOC to clarify its guidance, so that expectations are made clear and so businesses can effectively meet those expectations.

Government has an obligation to articulate rules that are comprehensible and can be implemented, said NSBA President Todd McCracken. “This is not a guidance at all. It provides no meaningful rules about how to proceed. It’s really just a threat that the EEOC may proceed against employers if, in hindsight, it decides it wants to do so,” he said.

NRF Vice President of Loss Prevention Richard Mellor said the guidelines “are unclear and open to interpretation.” Retailers who ask about criminal backgrounds run the risk of being charged with discrimination, but those who do not are not provided with any legal protection against lawsuits if an unscreened hire later commits a crime on the job, he said.

“The retail industry wants to keep [its] workplaces safe,” Mellor said. “Earlier interpretations of the guidelines were working fairly, but this overly burdensome guidance will add risk, increase expenses, and cause confusion and legal challenges for many retailers.”

Mellor pointed to the EEOC’s recommendation that employers not ask about criminal history on job applications. He argued that the question is not a device to automatically rule out an applicant, but instead a tool used to find out important information about a candidate prior to hiring. Mellor also took exception to conducting individual assessments on candidates turned away due to criminal background screens, especially in retail, where there is high fluctuation in hiring. “Such assessments would greatly slow down the hiring process and divert resources,” he said.

Garen Dodge, a management attorney with Jackson & Lewis in Reston, Va., testified that the guidance will exacerbate employers’ dilemma of whether to risk potential tort liability for negligent hiring by not conducting criminal background checks or risk discrimination charges by screening applicants.

He warned that the EEOC’s guidance and enforcement actions could chill employers’ use of necessary background screens in hiring.

“Convicted felons are not a protected class in America,” Dodge said. Making hiring decisions “void of any consideration based on any individual’s status as a member of a protected class is not discrimination. Employers have the obligation to protect the safety, health and well-being of their workers and those who use their goods and services, and to refrain from any hiring practice which would jeopardize these interests,” he told the commission.

The EEOC’s Rulemaking Authority Questioned

Several people in attendance noted that the EEOC has no actual authority to issue binding guidelines, because Congress intentionally withheld rulemaking authority from the EEOC when it passed the Civil Rights Act of 1964.

Commissioner Todd Gaziano told SHRM Online that “the EEOC has no authority to issue regulations, and this guidance in the guise of an interpretive regulation is questionable.”

The EEOC’s guidance documents have tended to become de facto substitutes for regulations, however, and courts have considered such guidance to be the standard that employers should meet.

Roy Maurer is an online editor/manager for SHRM. Follow him on Twitter @SHRMRoy


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